Question

Required information

[The following information applies to the questions displayed below.]

The Hartford Symphony Guild is planning its annual dinner-dance. The dinner-dance committee has assembled the following expected costs for the event:

Dinner (per person)	$	25
Favors and program (per person)	$	3
Band	$	700
Rental of ballroom	$	420
Professional entertainment during intermission	$	280
Tickets and advertising	$	1,400

The committee members would like to charge $42 per person for the evening’s activities.

Required:

1. What is the break-even point for the dinner-dance (in terms of the number of persons who must attend)?

2. Assume that last year only 100 persons attended the dinner-dance. If the same number attend this year, what price per ticket must be charged in order to break even?

Answer 1

Answer of Part 1:

Let the person be Q

Sales = Variable Expenses + Fixed Expenses + Profit
42Q = (25 + 3) 8Q + (700 + 420 + 280 + 1,400) + 0
42Q = 28Q + 2,800
42Q – 28Q = 2,800
14Q = 2,800
Q = 2,800 / 14
Q = 200

The break Even point for the dinner dance in terms of number of persons is 200

Answer of Part 2:

Let the price per ticket be X

Sales = Variable Expenses + Fixed Expenses + Profit
X*100 = (25 + 3) *100 + (700 +420 + 280 + 1,400) +0
100X = 2800 + 2,800 + 0
100X = 5,600
X = 5,600 / 100
X = $56

Ticket should be sold at $56 each in order to break even with 100 persons